Owner Lacked Attorney-Client Relationship
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Owner Lacked Attorney-Client Relationship

Limited liability companies’ (LLC’s) owner brought an action against an attorney and the law firm that represented the LLCs, alleging legal malpractice and breach of contract after the Commodity Futures Trading Commission (CFTC) filed a complaint against the owner and the LLCs. The plaintiffs claimed the defendants gave negligent advice to multiple LLCs co-owned and managed by the plaintiff, which lead to other violations. Addressing the tricky issue of representation in the corporate context, the Court of Appeals held the defendants did not owe the third-party duty of care to the owner arising out of their representation of the LLCs. Equally unavailing was that the owner was not the intended third-party beneficiary of law firm's retainer agreement with LLCs.

Reynolds v Lyman